Case Law Details
Sudhi Jain Vs ITO (ITAT Cuttack)
Assessee has filed her return of income at one place i.e. at Kolkata under her PAN A****2218B and the transactions done under PAN A****6846F are also duly reported and disclosed in the said return of income. No doubt has been shown by the revenue authorities on this contention of the assessee that the assessee has filed its return of income and also the assessee has substantiated the same by providing copies of the same to the revenue authorities during the assessment proceedings. Assessee has also taken the steps to surrender another PAN issued to her to show her bonafide intentions towards the tax compliance. Therefore, we are of the considered view that return of income was duly filed by the assessee and transaction under question were also disclosed which are subject to assessment by the AO, so penalty u/s 271F for failure to furnish the return of income u/s 139(1) of the act cannot be imposed on the assessee hence grounds of the assessee vide appeal no 90/CTK/2021 are decided in favour of the assessee, orders of the revenue authorities’ are set aside being against the principal of natural justice based on technicalities without proper consideration to the merits of the case. Thus, in our view penalty levied u/s. 271F of the Act is invalid
FULL TEXT OF THE ORDER OF ITAT CUTTACK
These two appeals by the assessee made against the order passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 30.07.2021 for the assessment year 2017-2018.
2. Briefly facts of the case are that the appellant assessee is an individual having PAN AIGPJ6846F, was issued a notice u/s 142(1)(i) of the IT Act on 04.12.2017 for the AY 2017-18 (FY 2016-17) to furnish correct return of income for the impugned AY before 03.01.2018. On non response of the assessee the assessement was completed u/s 144 of the Act determining the total Income of the assessee at Rs. 48,80,520/-. Penalty proceedings U/s 271F for failure to file the return of Income within the assessement year, in response the assessee filed a petition for stay of penalty proceedings and to keep the demand in abeyance for PAN –ITA No.90&91/CTK/2021 ACXPJ2118B for the AY 2017-18. The AO observed that the 271F proceedings which were initiated on the assessee for PAN number AIGPJ6846F and not on against the pen ACXPJ2118B, assessee again requested to keep the proceedings under section 271F in abeyance till the disposal of appeal on verification it was observe by the AO that the assessee has not filed appeal under the PAN number AIGPJ6846F on which the penalty proceedings were initiated accordingly penalty under section 271F for Rs. 5000 was imposed by order dated 22/02/2020.
3. Aggrieved with action of AO, assesse filed an appeal with the Ld CIT(A). The CIT(A) in his order u/s 250 of the ACT dismissed the appeal as invalid and not maintainable in law, observing as under:-
5. I have carefully examined the impugned order and the submissions of appellant. The impugned order is order u/s 272A(1 )(d) of IT Act and it is passed by ITa ward(1), Balasore in the name of Sudhi Jain Motiganj, Balasore, Orissa having PAN of AIGPJ6846F on 22/06/2020. The genesis of this order can be located in an order of assessment u/s 144 of IT Act by the same assessing officer in same PAN on 21.12.2019. The assessing officer during the penalty proceedings noted that there was no appeal by the asses se under PAN AIGPJ684SF. Therefore, appellant’s request to keep penalty proceedings in abeyance was rejected and penalty was imposed u/s 272A(1 )(d) of the ACT for non compliance of notice u/s 142(1) of the Act.
5.1 From the facts of case and the submissions it is revealed that the appellant is an individual having two PANs – ACXPJ2118B and AIGPJ6846F, which have been allotted on 12.09.2000 and 30.07.2007 respectively. As per appellant, the PAN – ACXPJ2118B comes under the jurisdiction of Ward- 44(2), Kolkata and PAN AIGPJ6846F comes under the jurisdiction of Ward – 1, Balasore, Orissa. The appellant claims to have filed the return of income for the A.Y. 2017-18, claiming the gross total income of Rs.15, 71,539/- on 24.10.2017 under PAN – ACXPJ2118B which comes under the jurisdiction of Ward- 44(2), Kolkata. The Assessing Officer, W-1, Balasore, on the basis of information relating to cash deposit during the period of demonetization in PAN AIGPJ6846F issued notice u/s.142(1) of the I.T.Act for the A.Y. 2017-18 under the PAN – AIGPJ6846F and subsequently passed an assessment order U/s.144 of the I.T.Act determining the total income at Rs.48;80,520/-. The appellant in ‘all the submissions has asserted that she is regularly filing Return of income in PAN ACXPJ2~ 18B and thus ITO ward (1) , Balasore has no jurisdiction over the assesse and the order u/s 144 of Act and subsequent orders of penalty u/s 271 F and 272A of the Act are without jurisdiction. The appellant accepts that some transactions have taken place in the PAN AIGPJ6846F but these were inadvertent and appellant initiated process for surrender of said PAN
5.2 Before examining the merits of case, it has to be seen whether the present appeal against impugned order is a valid appeal and if same is maintainable in law. In this case impugned order is passed in PAN AIGPJ6846F. The fact remains that this PAN also pertains to the appellant. The fact also remains that the assesse has carried out some cash transactions in’ this duplicate PAN, claimed by assesse to have carried inadvertently, though it is surprising to note that these inadvertent cash transactions have taken place during period of demonetization after 10 years of issue of duplicate PAN. But the fact that the appeal has been filed in PAN ACXPJ2118B has given rise to a legally untenable situation. It is to be emphasised that the two PANs are under jurisdiction of two different assessing officers. The assessing officer having jurisdiction over PAN ACXPJ2118B is ward 44(2), Kolkata whereas the impugned order is passed by ITO ward (1), Balasore in PAN AIGPJ6846F. Section 246A of IT Act prescribes the orders/intimations against which an appeal can be filed. Since there is no order by AO ward 44(2), Kolkata having jurisdiction over PAN ACXPJ2118B against which an appeal can be filed u/s 246A of the Act, any appeal filed in such PAN is a nullity and void ab initio. No appeal can be filed against a non existing order. For the sake of imagination, if any appellate order is passed here, the same will travel to assessing officer having jurisdiction over PAN ACXPJ2118B for consequential effect of litigated penalty order. How the assessing officer having jurisdiction over PAN ACXPJ2118B can pass a consequential effect where there is no order passed by him. The appellant’s contention that it’s the same assesse has no relevance in light of a legally untenable situation. The fact remains that appellant has two PANs. The transactions have taken place in second PANs due to which litigation has arisen and litigation has to be settled in same PAN in which it arose.
5.3 In light of discussion above, the appeal is treated as invalid and not maintainable in law and hence dismissed.
6. In result, appeal is dismissed.
4. In the same case, penalty proceedings u/s 272A(1)(d) were also initiated on the assessee for non compliance of order u/s 142(1)(i) of the IT Act for Rs. 10,000/- vide order u/s 272A(1)(d) dated 22/06.2020. On appeal by the assessee before the CIT(A) a similar stand has taken by the CIT(A) and dismissed the appeal of the assessee.
5. To challenge the orders passed by the CIT(A) the assessee has made these appeals to the ITAT. The assessee in its appeal in ITA No.90/CTK/2021 has raised the following grounds:-
1. For that the Ld CIT(A) erred in dismissing the appeal on technical ground that the appeal was not filed under the correct PAN when the assessee submitted the operative PAN in the appeal when the identity of the assessee was not disputed since it is not the PAN who is appellant but it is the assessee who is appellant u/s 246A and PAN is only for record purposes.
2. For that the Ld. CIT(A) erred in dismissing the appeal filed in PAN ACXPJ2118B as invalid and not maintainable when the assessee had already applied for surrender of PAN AIGPJ6846F and was filing her returns in her regular PAN i.e.ACXPJ2118B.
3. For that the Ld CIT(A) erred In dismissing the appeal without appreciating the submissions of the assessee that the order passed was without jurisdiction.
4. For that on the facts and circumstances of the case the AO should have transferred the records to the AO having jurisdiction and in any case the issue should have been referred to the Pr. CIT for determination of jurisdiction as otherwise the penalty proceeding is bad in law.
5. For that the initiation of penalty proceeding s u/ s 271F was bad in law when there was no failure on the part of the assessee and the assessee already filed its income tax return u/s 139 within due date as per income tax law.
6. For that the penalty proceeding was otherwise not in accordance with law since the same was not initiated against the assessee but raised against PAN AIGPJ6846F.
7. For that on the facts and in the circumstances of the case the penalty imposed is not in accordance with law.
6. The assessee in its appeal in ITA No.91/CTK/2021 has raised the following grounds:-
1. For that the Ld CIT(A) erred in dismissing the appeal on technical ground that the appeal was not filed under the correct PAN when the assessee submitted the operative PAN in the appeal when the identity of the assessee was not disputed since it is not the PAN who is appellant but it is the assessee who is appellant u/s 246A and PAN is only for record purposes.
2. For that the Ld. CIT(A) erred in dismissing the appeal filed in PAN ACXPJ2118B as invalid and not maintainable when the assessee had already applied for surrender of PAN AIGPJ6846F and was filing her returns in her regular PAN i.e.ACXPJ2118B.
3. For that the Ld CIT(A) erred In dismissing the appeal without appreciating the submissions of the assessee that the order passed was without jurisdiction.
4. For that on the facts and circumstances of the case the AO should have transferred the records to the AO having jurisdiction and in any case the issue should have been referred to the Pr. CIT for determination of jurisdiction as otherwise the penalty proceeding is bad in law.
5. For that the initiation of penalty proceeding s u/ s 272A(1)( d) was bad in law when there was no failure on the part of the assessee and the assessee already filed its income tax return u/s 139 within due date as per income tax law.
6. For that the penalty proceeding was otherwise not in accordance with law since the same was not initiated against the assessee but raised against PAN AIGPJ6846F.
7. For that on the facts and in the circumstances of the case the penalty imposed is not in accordance with law.
7. Ld AO of the assessee drawn our attention to the documents filed in his paper book. On perusal of the paper book at page 15 copy of notice issued by ITO, Ward-1, Balasore dated 28/02/2017 on assessee Ms Sudhi Jain with PAN AIGPJ6846F for Cash Transactions made during 9th November to 30th December 2016 regarding cash deposit of Rs. 27,76,230/- was available. It is further submitted that the assessee has always complied with and responded to the notices of the Ld AO, which is further substantiated by showing us the assesses reply to AO on 12/05/2017, along with ITR for last 3 year, Copy of VAT registration, Cash book statement from 07.11.2016 to 28.12.2016. It is also submitted that the transactions of Rs. 27,76,230/- are relates to her business and are ITA No.90&91/CTK/2021 reflected in her income tax return for the FY 2016-17 filed on PAN ACXPJ2118B. Assessee has also submitted her response towards further notices by AO u/s 142(1)(1) on 14.12.2017 and 13.05.2017. Further Notice U/s 144 issued on assessee on 16.12.2019 was responded on 18.12.2019 paper book page no 69 to 71 submitted with the Income Tax Department on 19.12.2019.
8. The Ld AO of the assessee submitted that the assessee has always submitted all the replies / compliances to the queries of Ld AO also the return of income was filed by the assessee on PAN ACXPJ2118B showing all the transactions under question. The assessee has also surrendered the dual PAN erroneously issued number AIGPJ6846F vide acknowledgment number 100209700122351 dated 21.03.2017 the same was informed by letter to AO on 05.07.2017. Hence, imposing penalty u/s 271F for failure in filing of ITR and 272A(1)(D) is bad in law. Also, the Ld CIT(A) has erred in dismissing the appeal of the assessee on technical ground that the appeal was not filed under the correct PAN when the assessee submitted the operative PAN in the appeal when the identity of the assesee was not disputed.
9. Ld DR on the other hand has relied upon the orders of revenue authorities.
10. We have heard the rival contentions and perused material available on record. From the above discussion it is clear that the Assessee has filed her return of income at one place i.e. at Kolkata under her PAN ACXPJ2218B and the transactions done under PAN AIGPJ6846F are also duly reported and disclosed in the said return of income. No doubt has been shown by the revenue authorities on this contention of the assessee that the assessee has filed its return of income and also the assessee has substantiated the same by providing copies of the same to the revenue authorities during the assessment proceedings. Assessee has also taken the steps to surrender another PAN issued to her to show her bonafide intentions towards the tax compliance. Therefore, we are of the considered view that return of income was duly filed by the assessee and transaction under question were also disclosed which are subject to assessment by the AO, so penalty u/s 271F for failure to furnish the return of income u/s 139(1) of the act cannot be imposed on the assessee hence grounds of the assessee vide appeal no 90/CTK/2021 are decided in favour of the assessee, orders of the revenue authorities’ are set aside being against the principal of natural justice based on technicalities without proper consideration to the merits of the case. Thus, in our view penalty levied u/s. 271F of the Act is invalid. The Assessing Officer is directed to delete the penalty. Accordingly, the appeal of the assessee in ITA No.90/CTK/2021 is allowed.
10. Regarding penalty proceedings u/s 272A(1)(d) which reads as under:-
272A (1)
“If any Person –
(d) fails to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 of fails to comply with a direction issued under sub-section (2A)of section 142.”
11. Penalty under section 272A (1)(d) can only be imposed on an assessee if the assessee fails to comply towards the notice issued under sub-section (1) of section 142 or sub-section (2) of section 143 of fails to comply with a direction issued under sub-section (2A)of section 142. However in the present case the assessee has shown a responsible conduct at all the times by responding towards the notices issued hence penalty under section 272A (1)(d) cannot be imposed. Accordingly ground rose under appeal No 91/CTK/2021 are allowed to the assessee, orders of the revenue authorities’ are set aside. Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the penalty.”. Thus, the appeal of the assessee in ITA No.91/CTK/2021 is allowed.
12. In the result, both appeals of the assessee are allowed.
Order pronounced in the open court on 06/07/2022.
